Consumers still favour conventional gas

18 March 2014

Importing gas on long-term contracts still popular despite shale gas revolution in US

The global gas sector will still predominantly favour conventional resources rather than shale and other unconventional reserves in the future.

Speaking at the MEED Qatar Projects 2014 conference in Doha on 18 March, Akram Alawi, principal at US management consultancy Bain & Company Middle East, stated that despite higher shale gas production from countries such as Canada and the US, conventional gas supplies would still be more highly valued due to reliability of supply.

“The long-term contract model of buying gas is still popular and that is because consumers need a constant supply of the resources,” he said.

The executive also said that about 150 million tonnes a year (t/y) of liquefied natural gas (LNG) was displaced due to the onset of US shale gas production. About 100 million t/y of that figure was how much the US planned to import and 50 million t/y is the capacity that the US is expected to finally export.

Qatar is the world’s largest exporter of LNG and has a capacity of 77 million t/y. The Gulf state now sells predominantly to Asian markets, where prices regularly fetch more than $16 a million BTUs.  

Senior executives from Qatar have regularly stated that they welcome shale gas as it drives research into gas-powered technologies as well as adding longevity to the country’s most abundant natural resource.

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